23/01/2023 Daily Reports
- EUR/USD advances for the third consecutive session and revisits the 1.0860 area amidst alternating risk appetite trends and humble gains in the greenback. The pair ended the week around 1.0855, still bullish in the daily chart.
- Indeed, the appetite for the risk complex appears somewhat subdued amidst the mild bid bias in the dollar and rising yields on both sides of the ocean on Friday.
- Earlier in the session Producer Prices in Germany contracted 0.4% MoM in December and rose 21.6% over the last twelve months. Later, ECB Chairwoman C.Lagarde will participate in a panel discussion on “Global Economic Outlook: Is this the End of an era?” at the World Economic Forum in Davos.
- The EUR/USD pair is trading near the 1.0855, up for the day with bullish stance in daily chart. The pair still stabilized above 20 and 50 SMA, indicates bullish strength. Meanwhile, the 20 SMA continued accelerating north and developing far above longer ones, suggests bulls not exhausted yet. On upside, the immediate resistance is 1.0890, break above this level will extend the advance to 1.0950.
- Technical readings in the daily chart support the bullish stance. The RSI indicator is above 65. The Momentum indicator stabilizes in positive territory, indicating bullish potentials. On downside, the immediate support is 1.0760 and below this level will open the gate to 1.0710.
- GBP/USD seesaws during the North American session, around the 1.2360-1.2390 region, around the London Fix, unable to gain a clear direction. Risk appetite increased, which usually favors the Pound Sterling (GBP), but soft UK economic data weighed on the GBP/USD. The GBP/USD ended the week at 1.2391, still bullish in the daily chart.
- Sentiment remains upbeat. The US Dollar (USD) retraced from earlier highs, as shown by the US Dollar Index, at 102.552, clings to minuscule gains of 0.05% at around 102.103. Therefore, the GBP/USD climbed from daily lows of around 1.2330s, aiming to cut its earlier losses.
- Data-wise, the US economic calendar revealed that Existing Home Sales dropped 1.5% and reached their lowest level since 2010, a report of the National Association of Realtors showed. The Federal Reserve’s (Fed) tightening cycle pushed the housing market into recession. But lately, some Fed officials revealed its intentions to slow the pace of rate hikes, emphasizing the need to hold rates higher for longer.
- The GBP/USD offers bullish stance in daily chart. Cable stabilizes above 20 and 50 SMA, indicating bullish strength in short term. Meanwhile, the 20 and 50 SMA continues accelerating north and developing above 200 SMA, suggests bulls not exhausted yet. On upside, The immediate resistance is 1.2450 with a break above it exposing to 1.2670.
- Technical readings in the daily chart support the bullish stances. RSI indicator stabilizes around 66, while the Momentum indicator stabilizes above the midline, suggesting upward potentials. On downside, the immediate support is 1.2250, unable to defend this level will resume the decline to 1.2150.
- Gold price retreats from multi-month highs ahead of the weekend due to the US Dollar recovering some ground and elevated US Treasury bond yields, despite recessionary fears around the US economy. Hence, the XAU/USD is retracing from daily highs of $1938, exchanging hands at $1926, down 0.28%.
- The US equity markets opened in the green, portraying investors’ optimism. US big tech companies are reporting earnings, keeping investors positive. Layoffs reported by Microsoft, Amazon, and Google’s Alphabet, are grabbing the headlines ahead of the release of US housing data. Existing Home Sales are foreseen to drop to 3.96M compared to the last month’s reading of 4.09M, while the MoM reading is estimated to improve to -5.4%, from November’s -7.7% fall.
- The US Dollar Index, a measure of the USD value against a basket of currencies, advances 0.38%, up at 102.447, taken off Gold’s bright ahead of the weekend. Additionally, the US 10-year benchmark note rate is yielding 3.459%, gaining six and a half bps, a headwind for XAU/USD.
- Gold price stabilized around 1926, down for the day and bullish in the daily chart. The gold price still stabilized above 20 and 50 SMA, suggesting bullish strength in short term. Meanwhile, the 20 and 50 SMA continued accelerating north and developing above 200 SMA, indicating bulls not exhausted yet. On upside, the immediate resistance is 1938, break above this level will open the gate for more advance to 1960 area.
- From a technical perspective, the RSI indicator holds above the mid-line and stabilizes around 69, still on a bullish strength. The Momentum indicator continues developing in positive territory, suggests more upside potentials. On downside, the immediate support is 1896, below this area may resume the decline to 1868.
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- The USD/JPY moved off daily highs during the American session on Friday, pulling back under 130.00. The pair peaked at 130.60, the highest level in two days. The greenback weakened late on Friday amid an improvement in risk appetite.
- Despite ending far from the top, the US Dollar is on its way to the biggest weekly gain in months versus the Japanese Yen. The fact that the Bank of Japan did not “pivot” from its current ultra-accommodative monetary policy weighed on the Yen. Still, market participants await a shift during the second quarter when Kuroda’s term expires in April. Japan’s latest Core CPI numbers favor that Change.
- Also, sharp moves in government bond yields favored volatility in Yen’s crosses. Fears about the economic outlook boosted the demand for safety but also, central bankers continued to talk about the necessity of higher interest rates for a some time, limiting the downside in yields.
- The USD/JPY pair stabilized around 129.60, up for the day and bearish in the daily chart. The price maintains the downward slope and develops below all main SMAs, suggests bearish strength in short term. Meanwhile, 20 SMA continued accelerating south and developing below longer ones, indicating bears not exhausted. On upside, overcome 130.60 may encourage bulls to challenge 131.60, break above that level will open the gate to 133.00.
- Technical indicators still suggest the bearish strength. RSI fell to 41, while the Momentum indicator stabilize in negative territory, suggests downward potentials. On downside, the immediate support is 128.70, break below this level will open the gate to 127.20 area.
- DJI advanced on Friday, climbed from intraday low of 33030 area to high 33480. It hold near the top to ended the week, indicates bullish sign in the hourly chart. Right now market is standing above 20 and 50 SMAs, suggests a bullish strength. Meanwhile, 20 SMA started turning north and heading towards longer ones, suggests bulls not exhausted yet. On upside, overcome 33500 may encourage bulls to challenge 33850, break above that level will open the gate to 34130.
- Technical indicators also suggest the bullish movement, developing above the mid-line. RSI stabilized around 68, while the Momentum indicator hovering far above the mid-line, suggests upside potentials. On downside, the immediately support is 33000, break below this level will open the gate for more decline to 32700 area.
- The Brent continued the advance on Friday. It got some support from 50 SMA, climbed to high 87.64 and hold near the top to ended the week, bullish in the hourly chart. The price stabilizes above 20 and 50 SMA, suggests bullish strength in short term. Meanwhile, the 20 SMA continued accelerating north and developing above 50 SMA, indicates bulls not exhausted yet. On upside, overcome 87.80 may encourage bulls to challenge 89.20, break above that level will open the gate to 90.00.
- Technical indicators also suggest bullish movement, hovering above the midline. RSI climbs to 67, while the Momentum index is well above the midline, suggests upward potentials. On downside, the immediately support is 85.50, break below this level will open the gate for more decline to 83.70 area.
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